Thursday, February 13, 2014

Market Saturation In The Gun Industry?

It seems the panic buying spree as the result of the Sandy Hook massacre and the resulting fear of tighter gun controls might have finally peaked and is starting to taper off according to a story linked to by Bearing Arms.

The article quotes a Bloomberg article a bit but comes to the same conclusion that I did.
Although gun buyers may have reached the point that they feel somewhat comfortable about supplies, ammo is still a whole 'nuther story.

Cabela’s (CAB), a chain of outdoor stores that specialize in hunting and fishing equipment, said this morning the firearms market is cooling drastically.

Sales at Cabela’s stores open more than one year plummeted 10.1 percent in the recent quarter, primarily because of sluggish firearms sales and a “much sharper than expected” decline in ammunition buying, says Chief Executive Tommy Millner. Excluding guns and ammo, same-store sales were down only 3.5 percent for the retailer, which is based in Sidney, Neb.

The thinning crowd of gun buyers should not have been a surprise. In October, Cabela’s warned that the market was cooling “significantly.” FBI background checks, a leading indicator of firearm demand, have also been dropping. Federal applications to make a gun purchase last month were one-third fewer than a year ago.

While firearms are durable goods, ammunition is expendable, and the supply is in need of constant replenishment. Now that we have more guns on the market than ever before—and more shooters—the demand for ammunition is still high, and the cycle of speculation and hoarding continues, especially for harder to find cartridges in less common calibers and rimfire cartridges.

Things should return to normal for most centerfire cartridges over the next 6-9 months as long as there are no more panic-induced buying sprees. The rimfire market? Well, I’m pretty sure you didn’t want to shoot that .22LR until 2016, anyway.

There is of course much more at both places.

I see ammunition acquisition as still being a major concern for quite some time into the future and believe we will never again see the inexpensive costs per round we enjoyed before December 2012.

1 comment:

At the last gun show (Jan.) I sold 0 9mm and very little 40 and 45. I did a lot of people asking for 357. That's a caliber that the brass is really scarce. The gun shows right after New Town, I was having to leave the show and make more before the next day. It got so bad I had to get into bullet casting. If I could make 22 LR my sales problems would be over.

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